Friday, April 12, 2013

Weekly Initial Unemployment Claims Decrease

Weekly unemployment initial claims decreased significantly this week after increasing the previous three weeks. (Unemployment claims have increased three out of the last four weeks.)

First time unemployment jobless claims dropped to 346,000 for the week ending April 6th. This is a large decrease of 42,000 claims. As with any weekly claims report, it is really too soon to tell if this week's claims numbers have any meaning other than the usual weekly volatility. However, this is the largest weekly drop since November, when Hurricane Sandy significantly impacted unemployment data. The drop brings us back down to the range that we have been in for most of the past two months.

The four-week moving average # of claims increased by 3,000 last week after increasing by 12,000 the week before.First time claims continue at about the same level that they were five years ago, in early 2008.

(Even though these numbers are seasonally adjusted, weekly claims numbers are always a bit volatile and should only be analyzed in terms of a trend over a period of weeks. See the graph below.)

For the week ending March 23rd, 5,277,512people were receiving unemployment benefits under one of the programs that are available (regular state, federal extended unemployment compensation, or a few other smaller programs). This was a decrease of about 11,000continuing claims since the previous week. The number of continuing claims in the Federal Extended Unemployment Benefits program (the "Tiers") increased and the number of continuing claims in the Regular State program (the first 20 to 26 weeks of unemployment benefits) decreased. Claims in the "tiers" increased about 38,000 whereas claims in the Regular State program decreased about 52,000.

1,700,000 FEWER people are receiving unemployment benefits now vs. one year ago. We do not know what has happened to the people who are no longer receiving benefits; we do not know how many of those 1,700,000 people found employment, how many retired, etc. We do know that there are 1,266,000 more people reporting themselves as employed than a year ago and 1,910,000 more non-farm jobs. We also know that a grand total of 47,546,000 people have been hired between April 2012 and February 2013, the latest month for which numbers are available.

The percent of unemployed people receiving benefits decreased to about 44.7% for the week ending March 23rd.

The chart above is one of the BEST charts for understanding and observing changes in the weekly initial claims numbers over time. This year (red: 2012-13) and the past three years (blue: 2009-10, green: 2010-11 and black: 2011-12) are marked in different colors. You can see that, as a trend, first time claims for unemployment have declined from one year to the next,even though there are variations within the year. You can also see the impact of Hurricane Sandy on claims in November 2012. Though the number of initial unemployment claims has been variable over the past three months, it has continued a downward trajectory.

Be aware that:

The graph above shows first time claims, so people who have continued to receive benefits or who have lost unemployment benefits are not counted in these numbers.

They are seasonally adjusted, so most variations caused by weather or holidays are already included in these numbers.

As these are weekly numbers, they are more volatile than the monthly numbers.

First time unemployment claims decreased by 42,000 over those reported last week. Last week's initial claims numbers were revised upwards by 3,000.There are usually slight upwards revisions (1,000 to 3,000) in the numbers of initial claims in most weeks. Numbers reported this week also reflected changes in seasonal adjustments announced two weeks ago. (The chart above shows REVISED claims numbers.)

As usual, to put this into perspective, check out the red line on the chart above to see where jobless claims are now, in late 2012/early 2013, compared to the past three years.

In the week ending April 6, the advance figure for seasonally adjusted initial claims was 346,000, a decrease of 42,000 from the previous week's revised figure of 388,000. The 4-week moving average was 358,000, an increase of 3,000 from the previous week's revised average of 355,000.

The initial claims as announced last week were 385,000, so the claims from that week were revised upwards by 3,000.

Current February/March/April Initial Claims Continue to be the Lowest Since Late 2007/Early 2008.

As a whole, the current numbers of initial claims continue to be the lowest Winter-Spring initial claims numbers since late 2007/early 2008.

Continuing regular state claims, from people who are continuing to claim unemployment through the initial 20 to 26 week regular unemployment program,declined 12,000 for the week ending March 30th after increasing 21,000 the week before.3,079,000people filed continuing regular state claims in the week ending March 30th.As a whole, continuing regular claims continue to decline despite some individual weekly increases. (There were3,305,000 continuing claims a year ago.)

Total number of people receiving unemployment insurance is 44.7% of the officially unemployed for the week ending March 16th.

The weekly reportalso tells us the total number of people who are receiving unemployment benefits. For the week ending March 23rd, 5,277,512people were receiving unemployment benefits under one of the programs that are available (regular state, extended benefits, federal extended unemployment compensation, or a few other smaller programs). This compares with 11,815,000 people who are unemployed in unadjusted numbers according to the monthly March unemployment situation report which was released Friday, April 5th. Those numbers, showing that only 44.7% of the officially unemployed are receiving benefits, should make it clear that people do NOT need to be receiving unemployment insurance to be counted among the unemployed. (This ratio and these two numbers are NOT seasonally adjusted.)

Extended Benefits (EB) Only Available in Alaska

Extended Benefits claims were only available in Alaska during the week ending March 16th.

As of the week ending March 16th, only 434people were still receiving Extended Benefits, as mentioned above. As recently as last April, 440,660 people were receiving Extended Benefits.

Therefore, over the last eleven months, 99.9% of the people who were receiving Extended Benefits are no longer receiving such benefits. We do not know how many of these 440,000 people found jobs, how many have another source of income in the family, and how many have nothing.

To reiterate, while a decrease in the number of people FILING for initial claims is a good thing and indicates that fewer people are being laid off, a decrease in theTOTAL number of people getting unemployment insurance may only show that fewer people are eligible for unemployment insurance benefits.Any questions or confusion, please leave a comment or email me!

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